What drives financial markets?
Started: 31 Jan 2022 01:23 AM - Last Post: KellyV
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KellyV
Posts: 4
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What drives financial markets? - posted: 31 Jan 2022 01:23 AM
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The price of an asset depends on the balance of supply and demand. In other words, it is determined by buyers and sellers. Where supply meets demand, there is a market. What else can affect the value of a financial asset?
As already mentioned, these can be fundamental factors, such as the state of the economy, as well as technical ones, such as the market capitalization of cryptocurrencies. In addition, it is worth considering other factors, such as market sentiment or the latest news.
However, these are nothing more than factors that deserve attention. In fact, the price of an asset at one time or another depends on the balance of supply and demand.
What is a market trend?
A market trend is the general direction in which the price of an asset moves. In technical analysis, market trends are usually determined using price behavior, trend lines, or even key moving averages.
There are two main types of market trends: bull market and bear market. A bull market is a steady uptrend when the price rises. A bear market is a steady downtrend when the price falls. It is also possible to identify consolidating, or "sideways", markets when there is no clear trend.
It is worth noting that a market trend does not mean that the price always moves in the direction of the trend. A long-term bull market may contain smaller bearish trends, and vice versa. This is the nature of market trends. It all depends on the perspective and the chosen time scales. Long-term market trends are always more important than short-term ones.
The peculiarity of market trends is that they can be determined with absolute accuracy only in hindsight. You may have heard of the retrospective distortion-the tendency of people to convince themselves that they accurately predicted an event before it happened. As one can imagine, a retrospective distortion can significantly affect the process of determining market trends and making trading decisions.
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Moorrey
Posts: 3
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Re: What drives financial markets? - posted: 31 Jan 2022 03:42 AM
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Surely you have heard the definition of day trading on the cryptocurrency market. What does this mean, you ask. This is bidding on a specific day, at a certain time. The sale from and to is conducted by a bot, a fully automatic process. To decide for myself that day trading bitcoin reddit suits me much more than other types of trading. Here I am sure that I will not fail with the deal.
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Dustbunny
Posts: 3
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Re: What drives financial markets? - posted: 29 Mar 2022 09:10 AM
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Every market is dependent on many factors, be it forex, stocks or cryptocurrencies. Geopolitical events affect everything, and financial news plays a huge role in all of this.
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Dustbunny
Posts: 3
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Re: What drives financial markets? - posted: 29 Mar 2022 09:13 AM
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I would also like to point out a peculiarity of financial news.
A lot of news in the markets is manipulation, just look at the cryptocurrency market. Every month some country bans bitcoin even though it does not have such instruments and every time it is reflected in the price.
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Germa1n
Posts: 2
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Re: What drives financial markets? - posted: 27 May 2023 08:20 AM
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